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Austin experiences growing pains as one of America's hottest real estate markets

Austin housing booms as workers move to Texas
Housing prices boom as workers move to Austin, Texas, abandoning high living costs in California 03:14

A trip down Lake Austin with realtor Cord Shiflet is nothing short of jaw-dropping. He's used to selling high-dollar luxury properties like those on the waterfront. But since March 2020, demand – and what buyers will spend – has shocked even him.

"They could probably get $25 million for it, if they let go of it," he said of one property.

"March through June, we had 19 buyers that came that were up to $20 million," he told correspondent Janet Shamlian. "We've never seen that before. I lost count after June. And if I had to guess, I would say we had 40 buyers that were $20 to $50 million."

And everyone, he said, wants to live on the lake.

Laid-back and long known for its food and music scene, the capital of Texas has become one of the fastest-growing cities in the nation. The downtown skyline is a ballet of cranes and new skyscrapers. Tech giants like Google and Apple are expanding their footprint, and Tesla is building a massive manufacturing plant here.

According to Zillow, home prices in Austin are up more than 18% in the last year, creating a shortage of affordable housing.

Austin, Texas, is witnessing a housing boom. CBS News

Since the pandemic started, city leaders said, the flow of people moving to Austin has turned to a flood. Many are from California, like startup founder Ben Rehnema, who moved with partner Craig from a one-bedroom in San Francisco.

Shamlian asked, "How is your situation here financially better for you than it was in San Francisco?"

"Here in Austin, you know, for the same price, around $3,000 a month, I can live in a three-bedroom house," Rehnema said. "I have a home gym, I have a home office, I have a backyard."

Noe Elias has one, too, along with a million-dollar view from his home in the low-income neighborhood where he's lived for decades. With rising property taxes, the second-grade teacher doesn't know how long he can afford to stay here, as working-class neighborhoods close to downtown are turned into high-priced housing.

"The city council, the local government, has to really, you know, take initiative to protect the working families – families that make less than $50,000 a year," Elias said.

He said some state government and city employees, long Austin's backbone, are moving outside the city, where prices are cheaper – and the number of homeless is growing.

Realtor Shiflet said that even when buyers can afford a home they love, it's become hard to seal the deal. "We had a house go on the market last week up near Round Rock, $400,000 house. It had 96 offers in two days," Shiflet said. "Buyers can't compete with that. I mean, if you're not all-cash, ready to close, you're not going to get it."

Growing pains amid a growth spurt, as the pandemic fuels a city's surge.

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